Financial Institution Fraud and Failure Report 2004
Financial Institution Fraud and Failure Report
For Fiscal Year (FY) 2004
Ending September 30, 2004
The FBI's mission in the area of financial institution fraud (FIF) is to identify, target, disrupt, and dismantle criminal organizations and individual operations engaged in fraud schemes which target our nation's financial institutions. Additionally, the FBI seeks to identify, undertake, and promote prevention measures, where available, to reduce the opportunity for fraud to take place within the financial institution arena. Within white-collar crimes, FIF investigations are among the most demanding, difficult, and time-consuming cases undertaken by law enforcement. Efforts by the FBI and the Department of Justice have attained extraordinary results since the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989.
Areas of primary investigative interest relative to FIF include financial institution failures, insider fraud, identity theft, check fraud, counterfeit negotiable instruments, check kiting, and mortgage and loan fraud. FIF investigations related to emerging technologies and computer-related banking are taking on added significance among the nation's financial institutions.
Since the 1992 peak of the savings and loan crisis, the FBI has been able to refocus its investigative efforts from failed financial institution cases to other high-priority FIF matters. At the close of FY 2004, the total number of pending FIF investigations for the FBI was 5,125. Of this total, 60 failure cases, or less than 1 percent, involved criminal activity related to a failed financial institution. This statistic reflects a 92 percent reduction in failure investigations since the July 1992 peak of 758 cases.
However, as the number of failure investigations has declined, the number of major FIF investigations has remained substantial. As of FY 2004, the FBI was investigating 3,915 major cases, or 76.3 percent of all pending FIF cases. This is significant in view of the fact that convictions related to major case investigations have remained constant since FY 1995, surpassing total convictions for major cases during the 1992 peak.
During the late 1980s and early 1990s, approximately 60 percent of the fraud reported by financial institutions related to bank insider abuse. Since then, external fraud schemes have replaced bank insider abuse as the dominant FIF problem confronting financial institutions. The pervasiveness of check fraud and counterfeit negotiable instrument schemes, technological advances, as well as the availability of personal information through information networks, has fueled the growth in external fraud. In many instances, the international aspects associated with many of these schemes have increased the complexity and severity in the fraud being committed.
__________________________________
1A major case is defined as an investigation pertaining to a failed financial institution, or where the loss or loss exposure to the financial institution exceeds $100,000
For the period of April 1, 1996, through September 30, 2004, the FBI received 340,781 Suspicious Activity Reports (SARs) for criminal activity related to check fraud, check kiting, counterfeit checks, and counterfeit negotiable instruments. These fraudulent activities accounted for 46.5 percent of the 732,161 SARs filed by U.S. financial institutions (excluding Bank Secrecy Act violations), and equaled more than $9 billion in losses.
The FBI continues to concentrate its efforts on organized criminal groups involved in these activities. These organized groups are often involved in the sale and distribution of stolen and counterfeit corporate checks, money orders, payroll checks, credit and debit cards, U.S. Treasury checks, and currency. Furthermore, the organized groups involved in check fraud and loan fraud schemes are often involved in illegal money-laundering activities in an effort to conceal the proceeds from their crimes.
Criminal activity has become more complex and loan frauds are expanding to multitransactional frauds involving groups of people from top management to industry professionals who assist in the loan application process. These professionals include loan brokers, appraisers, accountants, and real estate attorneys. Such transactions are sometimes hidden against a backdrop of genuine transactions which give them an appearance of legitimacy. Due to the complexity of these crimes, more FIF investigations are being initiated than ever before. These cases target large-scale fraud operations, often involving hundreds of subjects in multiple jurisdictions.
Other fraud matters affecting the nation's financial institutions are being classified and worked by the FBI as Corporate Fraud, Cyber Fraud, and Terrorist Financing. The results of these cases are not included in this report.
The lines between traditional banking services and other financial services now offered by these institutions are fading. As financial institutions become less regulated and provide more financial services to the public through the sale of insurance, securities, investment products, and on-line banking, the nature of FIF will change in terms of the potential impact to the nation's financial institutions.
The FBI has responded to these trends by providing proactive deterrents to assist the nation's banking infrastructure in combating FIF. The FBI and the Office of the Comptroller of the Currency published Check Fraud: A Guide to Avoiding Losses, (revised in 1999 by the FBI) to assist financial institutions in identifying check fraud-related schemes. Another publication produced in 2001 by the FBI entitled: "How Financial Institutions Can Help the FBI" can assist financial institutions in preventing
and reporting financial crimes as well as bank robberies.
_____________________
2These statistics are derived from the Suspicious Activity Report database, which is owned by the five Federal banking regulatory agencies, and is maintained by the U.S. Treasury Department's Financial Crimes Enforcement Network.
I. FINANCIAL INSTITUTION FAILURE INVESTIGATIONS
AND PERCENT OF INCREASE (DECREASE) FROM PRIOR YEAR
Since February 1986, the FBI has tracked the number of financial institution failure investigations. From a peak of 758 cases in July 1992, failure investigations have steadily declined. Since the 1992 peak, failure investigations have decreased 92 percent. The matrix below illustrates the number of failure investigations and corresponding percentage change by fiscal year.
| FISCAL YEAR REPORT DATE |
FAILURE INVESTIGATIONS |
% CHANGE FROM PRIOR YEAR |
| 7/92 | 758 | - - - - |
| 9/93 | 651 | (-14.1%) |
| 9/94 | 531 | (-18.4%) |
| 9/95 | 395 | (-25.6%) |
| 9/96 | 247 | (-37.5%) |
| 9/97 | 200 | (-19.0%) |
| 9/98 | 142 | (-29.0%) |
| 9/99 | 129 | (-09.1%) |
| 9/00 | 99 | (-23.3%) |
| 9/01 | 97 | (- 2.1%) |
| 9/02 | 71 | (-26.8%) |
| 9/03 | 67 | (-5.6%) |
| 9/04 | 60 | (-10.4%) |
The chart and graphs which follow exhibits:
(a) Financial Institution Failure Investigations by Field Office and Category, during FY 2004;
(b) Financial Institution Failure Investigations for 2000 - 2004;
(c) Number of FDIC-Insured "Problem" Institutions for 2000 - 2004; and,
(d) Assets of FDIC-Insured "Problem" Institutions for 2000 - 2004.
FINANCIAL INSTITUTION FAILURE INVESTIGATION
BY FIELD OFFICE AND CATEGORY
FISCAL YEAR 2004
| FBI | FAILED | FAILED | FAILED | |
| FIELD OFFICE | BANKS | S&Ls | CREDIT UNIONS | TOTAL |
| ALBANY | 1 | 0 | 0 | 1 |
| ALBUQUERQUE | 0 | 0 | 0 | 0 |
| ANCHORAGE | 0 | 0 | 0 | 0 |
| ATLANTA | 0 | 0 | 1 | 1 |
| BALTIMORE | 1 | 0 | 0 | 1 |
| BIRMINGHAM | 0 | 0 | 0 | 0 |
| BOSTON | 2 | 0 | 1 | 3 |
| BUFFALO | 0 | 0 | 1 | 1 |
| CHARLOTTE | 2 | 0 | 0 | 2 |
| CHICAGO | 0 | 1 | 0 | 1 |
| CINCINNATI | 0 | 0 | 0 | 0 |
| CLEVELAND | 2 | 0 | 0 | 2 |
| COLUMBIA | 0 | 0 | 0 | 0 |
| DALLAS | 0 | 0 | 0 | 0 |
| DENVER | 1 | 0 | 0 | 1 |
| DETROIT | 2 | 0 | 0 | 2 |
| EL PASO | 1 | 0 | 0 | 1 |
| HONOLULU | 1 | 0 | 0 | 1 |
| HOUSTON | 0 | 2 | 0 | 2 |
| INDIANAPOLIS | 0 | 0 | 0 | 0 |
| JACKSON | 1 | 0 | 0 | 1 |
| JACKSONVILLE | 1 | 0 | 0 | 1 |
| KANSAS CITY | 0 | 0 | 0 | 0 |
| KNOXVILLE | 0 | 0 | 0 | 0 |
| LAS VEGAS | 1 | 0 | 0 | 1 |
| LITTLE ROCK | 0 | 0 | 0 | 0 |
| LOS ANGELES | 4 | 0 | 1 | 5 |
| LOUISVILLE | 0 | 0 | 0 | 0 |
| MEMPHIS | 1 | 0 | 0 | 1 |
| MIAMI | 1 | 1 | 0 | 2 |
| MILWAUKEE | 1 | 0 | 1 | 2 |
| MINNEAPOLIS | 3 | 0 | 0 | 3 |
| MOBILE | 0 | 0 | 2 | 2 |
| NEWARK | 0 | 2 | 0 | 2 |
| NEW HAVEN | 1 | 0 | 0 | 1 |
| NEW ORLEANS | 1 | 2 | 0 | 3 |
| NEW YORK | 3 | 1 | 0 | 4 |
| NORFOLK | 0 | 0 | 0 | 0 |
| OKLAHOMA CITY | 0 | 0 | 0 | 0 |
| OMAHA | 1 | 0 | 0 | 1 |
| PHILADELPHIA | 2 | 1 | 1 | 4 |
| PHOENIX | 0 | 0 | 0 | 0 |
| PITTSBURGH | 1 | 0 | 0 | 1 |
| PORTLAND | 0 | 0 | 0 | 0 |
| RICHMOND | 0 | 0 | 1 | 1 |
| SACRAMENTO | 0 | 0 | 0 | 0 |
| ST. LOUIS | 0 | 0 | 0 | 0 |
| SALT LAKE CITY | 1 | 0 | 0 | 1 |
| SAN ANTONIO | 2 | 1 | 0 | 3 |
| SAN DIEGO | 0 | 0 | 0 | 0 |
| SAN FRANCISCO | 0 | 0 | 0 | 0 |
| SAN JUAN | 0 | 0 | 0 | 0 |
| SEATTLE | 0 | 0 | 0 | 0 |
| SPRINGFIELD | 0 | 0 | 0 | 0 |
| TAMPA | 0 | 0 | 0 | 0 |
| WFO | 0 | 0 | 2 | 2 |
| TOTAL | 38 | 11 | 11 | 60 |
FINANCIAL INSTITUTION FAILURE INVESTIGATIONS
2000 - 2004
| YEAR | FAILURE INVESTIGATIONS |
|---|---|
| 2000 | 99 |
| 2001 | 97 |
| 2002 | 71 |
| 2003 | 67 |
| 2004 | 60 |
FDIC - INSURED “PROBLEM INSTITUTIONS” 2000 - 2004
| MONTH/YEAR | COMMERCIAL BANKS | SAVINGS INSTITUTIONS | TOTAL |
|---|---|---|---|
| 12/00 | 76 | 18 | 94 |
| 12/01 | 95 | 19 | 114 |
| 09/02 | 126 | 20 | 146 |
| 09/03 | 103 | 13 | 116 |
| 09/04 | 86 | 9 | 95 |
“Problem Institutions” – those with financial, operational or managerial weaknesses that threaten their continued viability.
Source: FDIC Quarterly Banking Profile through Third Quarter 2004
ASSETS OF FDIC - INSURED “PROBLEM INSTITUTIONS”
2000 - 2004
| MONTH/YEAR |
COMMERCIAL BANKS |
SAVINGS INSTITUTIONS | TOTAL ($ BILLIONS) |
|---|---|---|---|
| 12/00 | 17 | 7 | $24 |
| 12/01 | 36 | 4 | $40 |
| 09/02 | 38 | 4 | $42 |
| 09/03 | 29 | 1 | $30 |
| 09/04 | 24 | 1 | $25 |
“Problem Institutions” – those with financial, operational or managerial weaknesses that threaten their continued viability.
Source: FDIC Quarterly Banking Profile through Third Quarter 2004
II. FINANCIAL INSTITUTION FRAUD AND MAJOR CASES
UNDER INVESTIGATION BY THE FBI BY FISCAL YEAR
Following the 1982 deregulation of the savings and loan industry, and in conjunction with more speculative lending practices, the FBI initiated criminal investigations of hundreds of failed financial institutions throughout the United States. Since the July 1992 peak, the number of failure investigations has steadily declined. However, total FIF and major case investigations have leveled off to pre-1992 figures. At the close of FY 2004, the total number of pending FIF and major case investigations continue to exceed levels at the beginning of the savings and loan crisis. The following matrix reflects total pending FIF and major case investigations reported during FY 2000 through FY 2004.
|
FISCAL |
NUMBER OF PENDING FIF CASES |
% CHANGE FROM PRIOR YR |
NUMBER OF |
% CHANGE FROM PRIOR YR |
PERCENT MAJOR TO PENDING CASES |
| 2000 | 8,638 | - 1.9% | 4,081 | + 5.8% | 47.2% |
| 2001 | 8,184 | - 5.3% | 4,383 | + 7.4% | 53.5% |
| 2002 | 7,305 |
-10.8% |
4,287 |
-2.2% |
58.7% |
|
2003 |
5,869 |
- 19.7% |
4,027 |
- 6% |
68.6% |
| 2004 | 5,125 | -12.7% | 3,915 | -3% | 76.3% |
The chart and graphs which follow exhibits:
(a) Pending Cases by Institution Type and Major Cases for FY 2004;
(b) Pending and Major Cases for FYs 2000 - 2004; and
(c) Pending Caseload by Institution Type and Dollar Loss for FY 2004.
FINANCIAL INSTITUTION FRAUD CASES
BY INSTITUTION TYPE AND MAJOR CASE
(PENDING AS A SEPTEMBER 30, 2004)
| FIELD | TOTAL | MAJOR CASES | BANK | S&L | CREDIT UNION | TOTAL | TOTAL |
| OFFICE | FIF | OVER $100,000 | FAILURE | FAILURE | FAILURE | FAILURE | MAJOR CASES |
| CASES | NON-FAILURE | CASES | CASES | CASES | CASES | ||
| ALBANY | 58 | 38 | 1 | 0 | 0 | 1 | 39 |
| ALBUQUERQUE | 39 | 15 | 0 | 0 | 0 | 0 | 15 |
| ANCHORAGE | 14 | 10 | 0 | 0 | 0 | 0 | 10 |
| ATLANTA | 126 | 103 | 0 | 0 | 1 | 1 | 104 |
| BALTIMORE | 85 | 72 | 1 | 0 | 0 | 1 | 73 |
| BIRMINGHAM | 58 | 45 | 0 | 0 | 0 | 0 | 45 |
| BOSTON | 89 | 62 | 2 | 0 | 1 | 3 | 65 |
| BUFFALO | 29 | 18 | 0 | 0 | 1 | 1 | 19 |
| CHARLOTTE | 133 | 105 | 2 | 0 | 0 | 2 | 107 |
| CHICAGO | 239 | 213 | 0 | 1 | 0 | 1 | 214 |
| CINCINNATI | 159 | 97 | 0 | 0 | 0 | 0 | 97 |
| CLEVELAND | 166 | 110 | 2 | 0 | 0 | 2 | 112 |
| COLUMBIA | 77 | 55 | 0 | 0 | 0 | 0 | 55 |
| DALLAS | 234 | 199 | 0 | 0 | 0 | 0 | 199 |
| DENVER | 70 | 53 | 1 | 0 | 0 | 1 | 54 |
| DETROIT | 158 | 104 | 2 | 0 | 0 | 2 | 106 |
| EL PASO | 28 | 20 | 1 | 0 | 0 | 1 | 21 |
| HONOLULU | 68 | 46 | 1 | 0 | 0 | 1 | 47 |
| HOUSTON | 86 | 64 | 0 | 2 | 0 | 2 | 66 |
| INDIANAPOLIS | 66 | 56 | 0 | 0 | 0 | 0 | 56 |
| JACKSON | 52 | 31 | 1 | 0 | 0 | 1 | 32 |
| JACKSONVILLE | 37 | 31 | 1 | 0 | 0 | 1 | 32 |
| KANSAS CITY | 116 | 88 | 0 | 0 | 0 | 0 | 88 |
| KNOXVILLE | 43 | 27 | 0 | 0 | 0 | 0 | 27 |
| LAS VEGAS | 34 | 27 | 1 | 0 | 0 | 1 | 28 |
| LITTLE ROCK | 68 | 54 | 0 | 0 | 0 | 0 | 54 |
| LOS ANGELES | 258 | 246 | 4 | 0 | 1 | 5 | 251 |
| LOUISVILLE | 67 | 46 | 0 | 0 | 0 | 0 | 46 |
| MEMPHIS | 139 | 108 | 1 | 0 | 0 | 1 | 109 |
| MIAMI | 106 | 94 | 1 | 1 | 0 | 2 | 96 |
| MILWAUKEE | 96 | 65 | 1 | 0 | 1 | 2 | 67 |
| MINNEAPOLIS | 88 | 65 | 3 | 0 | 0 | 3 | 68 |
| MOBILE | 47 | 26 | 0 | 0 | 2 | 2 | 28 |
| NEWARK | 124 | 116 | 0 | 2 | 0 | 2 | 118 |
| NEW HAVEN | 43 | 36 | 1 | 0 | 0 | 1 | 37 |
| NEW ORLEANS | 135 | 79 | 1 | 2 | 0 | 3 | 82 |
| NEW YORK | 252 | 221 | 3 | 1 | 0 | 4 | 225 |
| NORFOLK | 24 | 22 | 0 | 0 | 0 | 0 | 22 |
| OKLAHOMA CITY | 91 | 65 | 0 | 0 | 0 | 0 | 65 |
| OMAHA | 92 | 72 | 1 | 0 | 0 | 1 | 73 |
| PHILADELPHIA | 155 | 120 | 2 | 1 | 1 | 4 | 124 |
| PHOENIX | 49 | 33 | 0 | 0 | 0 | 0 | 33 |
| PITTSBURGH | 92 | 61 | 1 | 0 | 0 | 1 | 62 |
| PORTLAND | 65 | 31 | 0 | 0 | 0 | 0 | 31 |
| RICHMOND | 73 | 45 | 0 | 0 | 1 | 1 | 46 |
| SACRAMENTO | 39 | 31 | 0 | 0 | 0 | 0 | 31 |
| ST. LOUIS | 88 | 49 | 0 | 0 | 0 | 0 | 49 |
| SALT LAKE CITY | 79 | 69 | 1 | 0 | 0 | 1 | 70 |
| SAN ANTONIO | 73 | 57 | 2 | 1 | 0 | 3 | 60 |
| SAN DIEGO | 58 | 42 | 0 | 0 | 0 | 0 | 42 |
| SAN FRANCISCO | 66 | 44 | 0 | 0 | 0 | 0 | 44 |
| SAN JUAN | 10 | 7 | 0 | 0 | 0 | 0 | 7 |
| SEATTLE | 89 | 49 | 0 | 0 | 0 | 0 | 49 |
| SPRINGFIELD | 84 | 62 | 0 | 0 | 0 | 0 | 62 |
| TAMPA | 67 | 62 | 0 | 0 | 0 | 0 | 62 |
| WFO | 144 | 89 | 0 | 0 | 2 | 2 | 91 |
| TOTAL | 5,125 | 3,855 | 38 | 11 | 11 | 60 | 3,915 |
PENDING AND MAJOR CASES
2000 - 2004
| FISCAL YEAR | NUMBER OF PENDING CASES | NUMBER OF MAJOR CASES |
|---|---|---|
| 2000 | 8,638 | 4,081 |
| 2001 | 8,184 | 4,383 |
| 2002 | 7,305 | 4,287 |
| 2003 | 5,869 | 4,027 |
| 2004 | 5,125 | 3,915 |
PENDING CASELOAD BY INSTITUTION TYPE AND DOLLAR LOSS FISCAL YEAR 2004
| INSTITUTION TYPE | FAILURES | > $100,000 | $25 - $99K |
|---|---|---|---|
| BANKS | 38 | 3,661 | 691 |
| S&L | 11 | 80 | 9 |
| CREDIT UNION | 11 | 114 | 32 |
FAST TRACK = 315
< $25K IN LOSSES = 163
TOTAL CASES = 5,125
III. STATISTICAL ACCOMPLISHMENTS FROM FBI INVESTIGATIONS
IN FINANCIAL INSTITUTION FRAUD AND FAILURE MATTERS
A. CONVICTIONS/PRETRIAL DIVERSIONS
Total FIF convictions, excluding local convictions, continued to decrease. However, the percentage of convictions in major cases continued to increase. The matrix below is illustrative of this trend.
| FISCAL YEAR | NUMBER OF CONVICTIONS* |
NUMBER OF MAJOR CONVICTIONS* |
% OF MAJOR TO TOTAL CONVICTIONS |
| 2000 | 2,783 | 1,394 | 50.1% |
| 2001 | 2,702 | 1,363 | 50.4% |
| 2002 | 2,397 | 1,328 | 55.4% |
| 2003 | 2,053 | 1,286 | 62.7% |
| 2004 | 1,728 | 1,265 | 73.2% |
* - includes PreTrial Diversions and excludes local convictions.
The charts and graphs which follow exhibits:
(a) Convictions and PreTrial Diversions for FYs 2000 - 2004;
(b) Types of Subjects Convicted During FY 2004;
(c) Total Convictions, "Outsiders vs Insiders" for FYs 2000 - 2004; and
(d) Convictions and PreTrial Diversions by Institution Type and Amount for FY 2004.
FINANCIAL INSTITUTION FRAUD CONVICTIONS AND PRETRIAL DIVERSIONS
(DOES NOT INCLUDE LOCAL CONVICTIONS)
| FBI | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR |
| FIELD OFFICE | 2000 | 2001 | 2002 | 2003 | 2004 |
| ALBANY | 28 | 27 | 19 | 22 | 20 |
| ALBUQUERQUE | 3 | 4 | 10 | 6 | 7 |
| ANCHORAGE | 6 | 31 | 8 | 24 | 8 |
| ATLANTA | 109 | 77 | 78 | 79 | 64 |
| BALTIMORE | 43 | 36 | 27 | 31 | 31 |
| BIRMINGHAM | 31 | 47 | 71 | 38 | 24 |
| BOSTON | 43 | 58 | 33 | 27 | 13 |
| BUFFALO | 29 | 24 | 22 | 17 | 5 |
| CHARLOTTE | 48 | 39 | 42 | 28 | 48 |
| CHICAGO | 74 | 96 | 103 | 88 | 36 |
| CINCINNATI | 40 | 51 | 39 | 47 | 80 |
| CLEVELAND | 105 | 103 | 96 | 151 | 119 |
| COLUMBIA | 36 | 46 | 32 | 36 | 44 |
| DALLAS | 185 | 141 | 120 | 107 | 84 |
| DENVER | 55 | 42 | 27 | 19 | 25 |
| DETROIT | 129 | 110 | 93 | 58 | 39 |
| EL PASO | 7 | 14 | 11 | 2 | 3 |
| HONOLULU | 22 | 33 | 27 | 18 | 22 |
| HOUSTON | 115 | 84 | 64 | 22 | 16 |
| INDIANAPOLIS | 27 | 25 | 17 | 16 | 10 |
| JACKSON | 27 | 22 | 25 | 24 | 15 |
| JACKSONVILLE | 23 | 15 | 10 | 13 | 14 |
| KANSAS CITY | 51 | 34 | 29 | 46 | 34 |
| KNOXVILLE | 26 | 15 | 20 | 17 | 12 |
| LAS VEGAS | 38 | 32 | 34 | 25 | 11 |
| LITTLE ROCK | 36 | 47 | 51 | 32 | 29 |
| LOS ANGELES | 103 | 67 | 79 | 70 | 47 |
| LOUISVILLE | 44 | 39 | 37 | 22 | 32 |
| MEMPHIS | 28 | 69 | 70 | 37 | 26 |
| MIAMI | 56 | 49 | 56 | 31 | 25 |
| MILWAUKEE | 39 | 52 | 39 | 34 | 23 |
| MINNEAPOLIS | 47 | 42 | 45 | 35 | 28 |
| MOBILE | 37 | 30 | 29 | 27 | 11 |
| NEWARK | 47 | 53 | 38 | 28 | 38 |
| NEW HAVEN | 10 | 15 | 7 | 10 | 22 |
| NEW ORLEANS | 52 | 87 | 52 | 65 | 61 |
| NEW YORK | 144 | 110 | 141 | 113 | 111 |
| NORFOLK | 12 | 42 | 22 | 11 | 19 |
| OKLAHOMA CITY | 60 | 46 | 42 | 24 | 26 |
| OMAHA | 31 | 32 | 26 | 23 | 37 |
| PHILADELPHIA | 109 | 105 | 83 | 74 | 58 |
| PHOENIX | 14 | 7 | 0 | 11 | 8 |
| PITTSBURGH | 39 | 38 | 31 | 31 | 17 |
| PORTLAND | 54 | 32 | 45 | 20 | 21 |
| RICHMOND | 49 | 50 | 44 | 35 | 18 |
| SACRAMENTO | 40 | 42 | 14 | 11 | 10 |
| ST. LOUIS | 59 | 61 | 58 | 67 | 48 |
| SALT LAKE CITY | 28 | 41 | 42 | 37 | 18 |
| SAN ANTONIO | 33 | 51 | 31 | 32 | 17 |
| SAN DIEGO | 37 | 27 | 31 | 6 | 8 |
| SAN FRANCISCO | 39 | 24 | 11 | 26 | 26 |
| SAN JUAN | 4 | 25 | 12 | 7 | 12 |
| SEATTLE | 116 | 77 | 89 | 40 | 45 |
| SPRINGFIELD | 44 | 47 | 40 | 54 | 23 |
| TAMPA | 25 | 23 | 20 | 19 | 26 |
| WFO | 47 | 66 | 55 | 60 | 54 |
| TOTAL | 2,783 | 2,702 | 2,397 | 2,053 | 1,728 |
TYPES OF SUBJECTS CONVICTED IN
FINANCIAL INSTITUTION FRAUD CASES
FISCAL YEAR 2004*
|
SUBJECT TYPE |
NUMBER OF SUBJECTS |
| All Other Subjects | 1371 |
| Bank Employee | 283 |
| Bank Officer | 91 |
| Illegal Alien | 29 |
| Legal Alien | 18 |
| Company or Corporation | 11 |
| Business Manager | 3 |
| Top Con Man | 2 |
| Boss | 1 |
| Federal Employee - GS 12 & Below | 1 |
| Federal Law Enforcement Officer | 1 |
| International or National Union Officer | 1 |
| Local - All Others | 1 |
| Office Manager | 1 |
| Representative | 1 |
| U.N. Employee without Diplomatic Immunity | 1 |
* Does not include PreTrial Diversions or local convictions
CONVICTIONS “OUTSIDERS VS INSIDERS”
2000– 2004
(no pretrial diversions or local convictions)
| FISCAL YEAR | TOTALCONVICTIONS | OUTSIDERS | BANK INSIDERS |
|---|---|---|---|
| 2000 | 2,719 | 1,973 | 746 |
| 2001 | 2,641 | 1,916 | 725 |
| 2002 | 2,303 | 1,776 | 527 |
| 2003 | 1,984 | 1,500 | 484 |
| 2004 | 1,679 | 1,318 | 361 |
CONVICTIONS & PRE-TRIAL DIVERSIONS
BY INSTITUTION TYPE & AMOUNT
FISCAL YEAR 2000
(No State or Local Statistics)
| INSTITUTION TYPE | FAILURES | > $100,000 | $25 - $99K |
|---|---|---|---|
| BANKS | 6 | 1,215 | 218 |
| S&Ls | 0 | 14 | 1 |
| CREDIT UNION | 0 | 30 | 14 |
FAST TRACK = 168
* <$25K IN LOSSES = 62
(*NOT TRACKED BY INSTITUTION TYPE)
B. INDICTMENTS AND INFORMATIONS
For FY 2004, the total number of defendants charged by indictment or information decreased 33.8 percent from FY 2003. The following matrix illustrates this trend.
| FISCAL YEAR | INDICTMENTS/INFORMATIONS* |
| 2000 | 2,877 |
| 2001 | 2,738 |
| 2002 | 2,471 |
| 2003 | 1,918 |
| 2004 | 1,822 |
* Does not include subjects charged in state or local jurisdictions.
The chart and graphs which follow exhibits:
(a) Total FIF Indictments and Informations for FYs 2000 - 2004; and
(b) Indictments and Informations by Institution Type and Dollar Loss for FY 2004.
FINANCIAL INSTITUTION FRAUD INDICTMENT/INFORMATIONS
(DOES NOT INCLUDE LOCAL INFORMATION/INDICTMENTS)
| FBI | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR |
| FIELD OFFICE | 2000 | 2001 | 2002 | 2003 | 2004 |
| ALBANY | 38 | 20 | 21 | 20 | 11 |
| ALBUQUERQUE | 5 | 8 | 7 | 5 | 6 |
| ANCHORAGE | 7 | 32 | 4 | 18 | 11 |
| ATLANTA | 94 | 87 | 56 | 71 | 67 |
| BALTIMORE | 54 | 35 | 44 | 45 | 16 |
| BIRMINGHAM | 30 | 38 | 78 | 35 | 29 |
| BOSTON | 49 | 49 | 32 | 25 | 26 |
| BUFFALO | 22 | 30 | 11 | 11 | 9 |
| CHARLOTTE | 46 | 70 | 40 | 22 | 56 |
| CHICAGO | 91 | 84 | 122 | 78 | 44 |
| CINCINNATI | 40 | 48 | 41 | 46 | 62 |
| CLEVELAND | 111 | 125 | 203 | 57 | 123 |
| COLUMBIA | 38 | 54 | 40 | 52 | 40 |
| DALLAS | 189 | 159 | 145 | 112 | 80 |
| DENVER | 46 | 38 | 22 | 24 | 24 |
| DETROIT | 111 | 84 | 57 | 43 | 63 |
| EL PASO | 12 | 12 | 7 | 8 | 4 |
| HONOLULU | 39 | 32 | 35 | 9 | 26 |
| HOUSTON | 130 | 105 | 41 | 32 | 14 |
| INDIANAPOLIS | 26 | 16 | 20 | 10 | 13 |
| JACKSON | 31 | 38 | 23 | 27 | 19 |
| JACKSONVILLE | 27 | 12 | 12 | 16 | 20 |
| KANSAS CITY | 48 | 39 | 52 | 47 | 32 |
| KNOXVILLE | 21 | 18 | 21 | 12 | 9 |
| LAS VEGAS | 45 | 39 | 18 | 23 | 10 |
| LITTLE ROCK | 46 | 56 | 32 | 26 | 38 |
| LOS ANGELES | 130 | 60 | 113 | 49 | 83 |
| LOUISVILLE | 44 | 39 | 44 | 32 | 24 |
| MEMPHIS | 33 | 81 | 82 | 25 | 38 |
| MIAMI | 74 | 55 | 55 | 19 | 54 |
| MILWAUKEE | 40 | 46 | 48 | 33 | 23 |
| MINNEAPOLIS | 57 | 40 | 37 | 38 | 23 |
| MOBILE | 37 | 23 | 23 | 33 | 10 |
| NEWARK | 49 | 41 | 52 | 29 | 38 |
| NEW HAVEN | 6 | 18 | 8 | 14 | 34 |
| NEW ORLEANS | 58 | 95 | 35 | 83 | 68 |
| NEW YORK | 128 | 115 | 136 | 116 | 123 |
| NORFOLK | 19 | 35 | 25 | 12 | 24 |
| OKLAHOMA CITY | 58 | 49 | 29 | 25 | 28 |
| OMAHA | 29 | 35 | 21 | 32 | 25 |
| PHILADELPHIA | 126 | 79 | 103 | 60 | 55 |
| PHOENIX | 5 | 3 | 6 | 26 | 8 |
| PITTSBURGH | 45 | 44 | 24 | 38 | 9 |
| PORTLAND | 46 | 43 | 30 | 26 | 21 |
| RICHMOND | 59 | 55 | 29 | 40 | 11 |
| SACRAMENTO | 42 | 36 | 21 | 7 | 8 |
| ST. LOUIS | 42 | 39 | 39 | 28 | 38 |
| SALT LAKE CITY | 24 | 47 | 38 | 35 | 20 |
| SAN ANTONIO | 34 | 37 | 32 | 33 | 22 |
| SAN DIEGO | 32 | 27 | 8 | 6 | 6 |
| SAN FRANCISCO | 32 | 27 | 35 | 40 | 14 |
| SAN JUAN | 3 | 30 | 3 | 17 | 15 |
| SEATTLE | 113 | 71 | 85 | 23 | 47 |
| SPRINGFIELD | 43 | 47 | 52 | 42 | 19 |
| TAMPA | 33 | 22 | 18 | 28 | 17 |
| WFO | 40 | 71 | 56 | 55 | 65 |
| TOTAL | 2,877 | 2,738 | 2,471 | 1,918 | 1,822 |
INDICTMENTS AND INFORMATIONS
BY INSTITUTION TYPE & AMOUNT
FISCAL YEAR 2004
(No State or Local Statistics)
| INSTITUTION TYPE | FAILURES | > $100,000 | $25 - $99K |
|---|---|---|---|
| BANKS | 4 | 1,332 | 201 |
| S&Ls | 0 | 46 | 1 |
| CREDIT UNION | 0 | 28 | 13 |
FAST TRACK = 144
* <$25K IN LOSSES = 53
(*NOT TRACKED BY INSTITUTION TYPE)
C. RECOVERIES, RESTITUTIONS, AND FINES
For FY 2004, statistical accomplishments for recoveries, restitutions, and fines continue to demonstrate the FBI's investigative efforts in addressing FIF. The matrix which follows illustrates actual dollar amounts recovered for FYs 2000 - 2004.
| FISCAL YEAR | RECOVERIES | RESTITUTIONS | FINES |
| 2000 | 48,513,930 | 588,927,165 | 8,012,361 |
| 2001 | 45,759,496 | 754,182,929 | 15,248,483 |
| 2002 |
28,164,377 |
1,983,796,156 |
7,614,787 |
| 2003 |
15,145,174 |
3,128,016,099 |
35,642,324 |
| 2004 |
30,561,112 |
3,132,922,982 |
18,104,071 |
The charts and graphs which follow exhibits:
(a) Recoveries by Office for FYs 2000 - 2004;
(b) Recoveries for FY 2004;
(c) Recoveries for FYs 2000 - 2004;
(d) Restitutions by Office for FYs 2000 - 2004;
(e) Restitutions for FY 2004;
(f) Restitutions for FYs 2000 - 2004;
(g) Fines by Office for FYs 2000 - 2004;
(h) Fines for FY 2004; and
(i) Fines for FYs 2000 - 2004.
RECOVERIES
FISCAL YEARS 2000 - 2004
| FBI FIELD OFFICE | 2000 | 2001 | 2002 | 2003 | 2004 |
| ALBANY | $73,654 | $131,656 | $533,000 | $265,840 | |
| ALBUQUERQUE | $609,099 | $361,633 | |||
| ANCHORAGE | $25,000 | $1,949 | |||
| ATLANTA | $327,896 | $712,784 | $318,658 | $21,902 | $59,650 |
| BALTIMORE | $243,900 | $242,963 | $36,900 | $187,164 | $29,379 |
| BIRMINGHAM | $333,521 | $82,915 | $61,000 | $237,607 | $51,342 |
| BOSTON | $788,779 | $20,334 | $236,086 | $240,424 | |
| BUFFALO | $2,430,982 | $4,450 | $8,250 | $4,200 | |
| CHARLOTTE | $193,000 | $3,065,459 | $152,462 | $242,932 | |
| CHICAGO | $3,470,842 | $2,841,700 | $290,372 | $1,206,647 | $2,510,585 |
| CINCINNATI | $7,760,789 | $470,738 | $65,803 | $284,556 | |
| CLEVELAND | $290,599 | $165,937 | $785,077 | $753,099 | $175,063 |
| COLUMBIA | $22,723 | $304,709 | $24,674 | ||
| DALLAS | $6,069,730 | $4,462,303 | $873,644 | $893,585 | $806,127 |
| DENVER | $25,400 | $274,111 | $8,714,188 | ||
| DETROIT | $128,702 | $151,417 | $158,566 | $2,376,036 | $298,923 |
| EL PASO | $102,000 | ||||
| HONOLULU | $4,258 | $3,000 | $288,172 | $25,669 | $1,500 |
| HOUSTON | $471,495 | $612,348 | $88,505 | $51,437 | $31,396 |
| INDIANAPOLIS | $190,003 | $15,647 | $6,185 | ||
| JACKSON | $10,000 | $65,767 | |||
| JACKSONVILLE | $25,532 | $10,075 | $165,900 | $151,836 | |
| KANSAS CITY | $1,977,558 | $2,400 | $167,006 | $141,407 | |
| KNOXVILLE | $146,800 | $19,720 | $3,100 | $99,334 | |
| LAS VEGAS | $552,583 | $22,850,495 | $542,500 | ||
| LITTLE ROCK | $144,989 | $792,900 | $11,334 | ||
| LOS ANGELES | $38,024 | $210,612 | $5,210 | $130,799 | $131,919 |
| LOUISVILLE | $20,524 | $63,426 | |||
| MEMPHIS | $377,880 | $114,008 | $483,507 | $145,763 | |
| MIAMI | $367,210 | $82,556 | $3,722,589 | $95,487 | |
| MILWAUKEE | $579,093 | $147,825 | $744,710 | $1,627,969 | $24,542 |
| MINNEAPOLIS | $28,400 | $28,135 | $4,000 | $330,075 | $70,000 |
| MOBILE | $135,783 | $6,020 | $39,000 | $148,085 | $3,430,666 |
| NEWARK | $514,504 | $1,383,688 | $1,550,531 | $55,000 | $18,485,902 |
| NEW HAVEN | $658,000 | ||||
| NEW ORLEANS | $370,261 | $425,350 | $718,333 | $274,646 | $57,019 |
| NEW YORK | $16,344,737 | $1,663,022 | $1,347,872 | $51,342 | $178,649 |
| NORFOLK | $57,785 | $88,787 | $23,000 | $157,100 | $24,435 |
| OKLAHOMA CITY | $3,036,952 | $397,335 | $1,496,976 | $1,315,712 | $953,600 |
| OMAHA | $251,334 | $2,000 | |||
| PHILADELPHIA | $164,406 | $657,873 | $201,068 | $889,917 | $14,900 |
| PHOENIX | $9,000 | $68,000 | $29,593 | ||
| PITTSBURGH | $162,650 | $166,500 | |||
| PORTLAND | $351,900 | $101,183 | |||
| RICHMOND | $211,826 | $70,451 | $8,800 | $238,376 | $583,538 |
| SACRAMENTO | $435,000 | ||||
| ST. LOUIS | $152,675 | $2,400 | $1,048,643 | $168,476 | $2,200 |
| SALT LAKE CITY | $154,252 | $17,495 | $18,000 | $109,067 | |
| SAN ANTONIO | $91,088 | $2,000 | |||
| SAN DIEGO | $126,980 | $2,000 | $313,808 | $417,000 | |
| SAN FRANCISCO | $83,635 | $283,111 | $10,000 | ||
| SAN JUAN | $33,250 | $99,331 | |||
| SEATTLE | $40,600 | $860,118 | $1,928,854 | $50,000 | $41,722 |
| SPRINGFIELD | $50,000 | $216,584 | |||
| TAMPA | $104,259 | $1,126,558 | $1,310,862 | $13,937 | |
| WFO | $53,467 | $42,415 | $640,262 | $126,859 | $53,245 |
| TOTAL | $48,513,930 | $45,759,496 | $28,164,377 | $15,145,174 | $30,561,112 |
RECOVERIES FOR FISCAL YEAR 2004
(DOES NOT INCLUDE FAST TRACK AND CASES BELOW $25,000)
| TYPE | BANKS | SAVINGS& LOANS | CREDIT UNIONS |
|---|---|---|---|
| FAILURES | $57,500 | -$0- | -$0- |
| >100K | $29,222,407 | -$0- | $417,000 |
| $25K-$99K | $746,687 | -$0- | $4,200 |
RECOVERIES
2000 - 2004
| FISCAL YEAR | RECOVERIES IN MILLIONS |
|---|---|
| 2000 | $48.5 |
| 2001 | $45.8 |
| 2002 | $28.2 |
| 2003 | $15.1 |
| 2004 | $30.6 |
RESTITUTIONS
FISCAL YEARS 2000 - 2004
| FBI FIELD OFFICE | 2000 | 2001 | 2002 | 2003 | 2004 |
| ALBANY | $2,540,612 | $22,598,265 | $11,312,507 | $944,303 | $9,356,717 |
| ALBUQUERQUE | $761,270 | $586,106 | $2,565,093 | $846,070 | |
| ANCHORAGE | $506,100 | $1,084,178 | $499,760 | $1,758,633 | $965,444 |
| ATLANTA | $99,022,661 | $28,405,185 | $48,953,228 | $273,084,188 | $13,431,838 |
| BALTIMORE | $3,154,008 | $3,521,279 | $18,166,924 | $694,701,811 | $54,103,859 |
| BIRMINGHAM | $13,841,516 | $1,533,885 | $21,799,928 | $8,285,970 | $18,209,471 |
| BOSTON | $23,707,038 | $5,061,464 | $2,929,969 | $2,029,355 | $6,082,676 |
| BUFFALO | $986,767 | $1,456,097 | $302,911 | $11,014,194 | $18,061,674 |
| CHARLOTTE | $6,613,148 | $12,840,558 | $12,844,936 | $37,809,022 | $2,688,851 |
| CHICAGO | $14,628,056 | $14,402,620 | $31,435,574 | $77,143,471 | $30,809,210 |
| CINCINNATI | $7,155,530 | $2,969,313 | $7,488,247 | $1,614,786 | $67,143,069 |
| CLEVELAND | $4,350,925 | $8,807,854 | $4,395,079 | $60,381,858 | $32,315,860 |
| COLUMBIA | $1,605,675 | $1,151,879 | $6,763,725 | $5,209,817 | $4,140,206 |
| DALLAS | $46,532,063 | $13,213,983 | $22,150,376 | $26,369,619 | $19,217,466 |
| DENVER | $5,277,399 | $111,897,964 | $2,743,222 | $14,952,272 | $3,142,330 |
| DETROIT | $12,565,518 | $6,526,381 | $26,969,365 | $10,860,548 | $5,648,662 |
| EL PASO | $29,991 | $1,485,987 | $630,323 | $1,257,410 | $147,054 |
| HONOLULU | $634,559 | $985,213 | $4,981,492 | $1,505,580 | $9,078,900 |
| HOUSTON | $3,945,801 | $169,758,548 | $15,702,375 | $20,088,102 | $28,231,008 |
| INDIANAPOLIS | $7,359,956 | $3,564,932 | $1,920,784 | $7,338,419 | $6,061,430 |
| JACKSON | $1,703,388 | $245,613 | $2,963,325 | $158,424,141 | $287,815 |
| JACKSONVILLE | $5,926,442 | $921,258 | $712,651 | $2,859,555 | $1,392,875 |
| KANSAS CITY | $6,655,288 | $3,571,000 | $2,310,880 | $16,835,743 | $375,676,323 |
| KNOXVILLE | $3,093,315 | $3,753,851 | $840,908 | $4,399,753 | $2,857,922 |
| LAS VEGAS | $1,415,794 | $6,620,797 | $5,997,581 | $2,000,917 | $1,949,382 |
| LITTLE ROCK | $2,526,365 | $4,847,964 | $5,568,148 | $15,169,291 | $1,561,984 |
| LOS ANGELES | $7,607,312 | $25,167,250 | $27,912,471 | $44,610,084 | $43,050,573 |
| LOUISVILLE | $1,332,049 | $7,534,820 | $3,271,780 | $472,095 | $22,709,365 |
| MEMPHIS | $5,159,927 | $2,140,819 | $5,192,691 | $10,181,502 | $4,995,365 |
| MIAMI | $8,266,800 | $18,188,727 | $4,550,765 | $28,029,624 | $555,123,560 |
| MILWAUKEE | $8,354,906 | $2,477,262 | $67,827,070 | $72,501,052 | $9,784,033 |
| MINNEAPOLIS | $2,702,742 | $31,632,365 | $2,412,448 | $14,655,008 | $26,055,079 |
| MOBILE | $1,402,015 | $853,357 | $1,739,125 | $5,790,465 | $1,445,148 |
| NEWARK | $7,975,914 | $20,269,442 | $5,863,109 | $16,217,624 | $21,820,014 |
| NEW HAVEN | $5,556,616 | $3,443,234 | $1,086,471 | $1,013,398 | $4,057,967 |
| NEW ORLEANS | $16,149,938 | $7,546,940 | $4,214,036 | $3,438,298 | $2,015,167 |
| NEW YORK | $124,258,634 | $40,323,392 | $127,861,261 | $122,753,742 | $1,600,914,476 |
| NORFOLK | $386,751 | $1,341,560 | $12,776,212 | $5,819,923 | $4,443,407 |
| OKLAHOMA CITY | $9,742,679 | $12,018,990 | $20,034,408 | $1,092,842,879 | $3,175,628 |
| OMAHA | $1,386,652 | $15,016,543 | $2,216,090 | $18,790,553 | $6,819,109 |
| PHILADELPHIA | $27,560,939 | $10,761,765 | $14,060,819 | $17,914,633 | $9,846,168 |
| PHOENIX | $1,360,794 | $581,061 | $1,448,602 | $314,357 | $656,135 |
| PITTSBURGH | $5,796,378 | $5,885,899 | $1,343,994,344 | $99,271,139 | $272,450 |
| PORTLAND | $2,129,837 | $74,835,401 | $7,177,980 | $5,239,573 | $770,115 |
| RICHMOND | $4,769,597 | $3,320,783 | $2,621,984 | $5,580,115 | $2,692,012 |
| SACRAMENTO | $7,677,294 | $1,583,162 | $1,183,884 | $1,195,146 | $1,636,777 |
| ST. LOUIS | $11,496,024 | $4,186,514 | $2,913,067 | $24,030,677 | $9,774,691 |
| SALT LAKE CITY | $1,054,738 | $927,751 | $2,342,030 | $8,916,679 | $4,852,466 |
| SAN ANTONIO | $5,906,486 | $2,991,760 | $8,282,163 | $8,343,942 | $15,900,765 |
| SAN DIEGO | $666,258 | $6,733,807 | $17,107,309 | $1,486,626 | $1,963,539 |
| SAN FRANCISCO | $15,109,412 | $1,011,118 | $1,620,720 | $32,684,279 | $1,111,624 |
| SAN JUAN | $375,177 | $92,590 | $620,587 | $3,271,368 | $14,401,590 |
| SEATTLE | $7,937,440 | $7,059,910 | $13,762,511 | $2,569,620 | $5,288,427 |
| SPRINGFIELD | $14,103,727 | $3,098,546 | $5,627,217 | $4,017,072 | $811,508 |
| TAMPA | $4,051,445 | $5,819,302 | $6,566,898 | $3,704,793 | $4,636,093 |
| WFO | $2,870,769 | $5,351,521 | $6,537,780 | $13,755,982 | $38,491,635 |
| TOTAL | $588,927,165 | $754,182,929 | $1,983,796,156 | $3,128,016,099 | $3,132,922,982 |
RESTITUTIONS FOR FISCAL YEAR 2004
(DOES NOT INCLUDE FAST TRACK AND CASES BELOW $25,000)
| TYPE | BANKS | SAVINGS& LOANS | CREDIT UNIONS |
|---|---|---|---|
| FAILURES | $20,408,526 | -$0- | $147,574 |
| >100K | $3,045,843,223 | $28,235,286 | $6,724,579 |
| $25K-$99K | $26,992,399 | -$0- | $376,277 |
RESTITUTIONS
2000 - 2004
| FISCAL YEAR | IN BILLIONS |
|---|---|
| 2000 | $0.588 |
| 2001 | $0.754 |
| 2002 | $1.983 |
| 2003 | $3.128 |
| 2004 | $3.132 |
FINES
FISCAL YEARS 2000 - 2004
| FBI FIELD OFFICE | 2000 | 2001 | 2002 | 2003 | 2004 |
| ALBANY | $18,200 | $5,142 | $870,668 | $182,362 | $300 |
| ALBUQUERQUE | $100 | $100 | $700 | $500 | |
| ANCHORAGE | $250 | $300 | $2,950 | $18,000 | |
| ATLANTA | $56,368 | $267,700 | $130,295 | $68,850 | $82,328 |
| BALTIMORE | $760,428 | $91,005 | $82,900 | $835,300 | $36,246 |
| BIRMINGHAM | $5,500 | $19,950 | $8,450 | $29,057 | $4,750 |
| BOSTON | $32,475 | $202,025 | $31,528 | $210,726 | $5,300 |
| BUFFALO | $11,450 | $300 | $5,424 | $850 | $4,000 |
| CHARLOTTE | $14,122 | $34,987 | $2,000 | $500 | $1,900 |
| CHICAGO | $1,087,850 | $96,620 | $234,802 | $13,850 | $749,366 |
| CINCINNATI | $38,885 | $7,325 | $35,156 | $1,750 | $11,300 |
| CLEVELAND | $124,600 | $54,488 | $39,540 | $46,372 | $34,974 |
| COLUMBIA | $200 | $21,550 | $61,743 | $8,500 | $104,131 |
| DALLAS | $319,251 | $91,952 | $19,430 | $139,066 | $134,400 |
| DENVER | $14,206 | $62,489 | $7,050 | $331,158 | $114,323 |
| DETROIT | $458,445 | $338,696 | $31,600 | $48,751 | $25,825 |
| EL PASO | $72,370 | $400 | $2,000 | $5,000 | |
| HONOLULU | $3,400 | $9,175 | $31,175 | $5,800 | $11,505,619 |
| HOUSTON | $87,035 | $65,705 | $74,047 | $30,100 | $958,489 |
| INDIANAPOLIS | $3,925 | $7,650 | $25,100 | $400 | $6,300 |
| JACKSON | $465,395 | $15,533 | $11,076 | $29,629 | $6,450 |
| JACKSONVILLE | $3,383 | $1,200 | $122,371 | $3,500 | $383,250 |
| KANSAS CITY | $8,275 | $316,723 | $28,995 | $1,800 | $1,007,100 |
| KNOXVILLE | $36,597 | $16,100 | $53,700 | $850 | $950 |
| LAS VEGAS | $16,936 | $2,350 | $218,752 | $2,975 | $675 |
| LITTLE ROCK | $13,750 | $6,500 | $27,268 | $113,284 | $1,900 |
| LOS ANGELES | $590,054 | $10,794,146 | $726,666 | $3,289,965 | $25,500 |
| LOUISVILLE | $3,100 | $33,725 | $266,472 | $15,789 | $4,550 |
| MEMPHIS | $5,375 | $447,691 | $263,854 | $383,083 | $23,922 |
| MIAMI | $50,000 | $29,400 | $23,850 | $110,000 | $26,300 |
| MILWAUKEE | $35,374 | $40,080 | $7,192 | $42,000 | $4,507 |
| MINNEAPOLIS | $513,050 | $144,782 | $1,179,900 | $9,975 | $3,600 |
| MOBILE | $24,462 | $550 | $57,982 | $2,000 | $700 |
| NEWARK | $132,680 | $39,150 | $805,371 | $9,700 | $244,826 |
| NEW HAVEN | $5,250 | $11,200 | $600 | $52,300 | $6,500 |
| NEW ORLEANS | $36,807 | $118,862 | $23,010 | $128,778 | $650,385 |
| NEW YORK | $400,525 | $574,050 | $63,500 | $779,591 | $343,323 |
| NORFOLK | $1,700 | $26,202 | $1,000 | $100 | $1,000 |
| OKLAHOMA CITY | $184,620 | $30,519 | $3,125 | $262,741 | $1,073,509 |
| OMAHA | $13,050 | $171,900 | $8,800 | $39,129 | $13,500 |
| PHILADELPHIA | $129,239 | $164,404 | $52,600 | $333,848 | $43,600 |
| PHOENIX | $637,585 | $13,097 | $425 | $1,978 | |
| PITTSBURGH | $254,094 | $151,600 | $19,600 | $25,523,600 | $1,000 |
| PORTLAND | $3,025 | $9,100 | $500 | $2,884 | $525 |
| RICHMOND | $137,718 | $27,766 | $24,600 | $13,125 | $4,000 |
| SACRAMENTO | $117,375 | $5,400 | $33,600 | $129,000 | $100 |
| ST. LOUIS | $69,700 | $9,100 | $400 | $22,485 | $55,222 |
| SALT LAKE CITY | $67,945 | $13,350 | $21,858 | $74,034 | $87,053 |
| SAN ANTONIO | $520,275 | $103,252 | $8,450 | $10,100 | $10,600 |
| SAN DIEGO | $8,160 | $12,999 | $1,625 | $75 | $20,569 |
| SAN FRANCISCO | $44,615 | $7,800 | $1,042,770 | $1,954,134 | $20,650 |
| SAN JUAN | $500 | $631,200 | $100 | $161,900 | |
| SEATTLE | $119,800 | $116,925 | $123,905 | $53,510 | $52,063 |
| SPRINGFIELD | $26,500 | $394,173 | $62,212 | $255,950 | $7,188 |
| TAMPA | $221,837 | $4,050 | $2,500 | $12,998 | $6,875 |
| WFO | $4,650 | $17,545 | $2,175 | $21,825 | $5,250 |
| TOTAL | $8,012,361 | $15,248,483 | $7,614,787 | $35,642,324 | $18,104,071 |
FINES FOR FISCAL YEAR 2004
(DOES NOT INCLUDE FAST TRACK AND CASES BELOW $25,000)
| TYPE | BANKS | SAVINGS & LOANS | CREDIT UNIONS |
|---|---|---|---|
| FAILURES | $28,100 | $160,500 | $1,900 |
| >100K | $15,801,977 | $932,912 | $11,800 |
| $25K-$99K | $614,539 | -$0- | $374,537 |
FINES 2000 - 2004
| FISCAL YEAR | IN MILLIONS |
|---|---|
| 2000 | $8.0 |
| 2001 | $15/2 |
| 2002 | $7/6 |
| 2003 | $35.6 |
| 2004 | $18.1 |
D. SEIZURES AND FORFEITURES
Forfeiture provisions were added to the ten banking-related violations in FY 1989. This investigative tool has aided immensely in the effort to address FIF. The matrix which follows demonstrates accomplishments in these areas for FYs 2002 - 2004 and represents actual dollar amounts recovered.
| FISCAL YEAR | SEIZURES | FORFEITURES |
| 2002 | 13,277,362 | 4,013,342 |
| 2003 | 7,703,435 | 3,407,971 |
| 2004 | 16,343,881 | 14,254,838 |
The chart and graphs which follow exhibits:
(a) Seizures and Forfeitures by Office for FYs 2002 - 2004;
(b) Seizures for FYs 2002 - 2004; and
(c) Forfeitures for FYs 2002 - 2004.
SEIZURES AND FORFEITURES
FISCAL YEARS 2002 - 2004
| SEIZURES | FORFEITURES | ||||||
| FBI | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | FISCAL YEAR | |
| FIELD OFFICE | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | |
| ALBANY | $3,090 | $8,725 | $999,999 | $9,118 | $8,300 | $999,999 | |
| ALBUQUERQUE | $3,175 | ||||||
| ANCHORAGE | $21,607 | $157,705 | $18,499 | ||||
| ATLANTA | $1,315,000 | $28,167 | $15,450 | $15,000 | |||
| BALTIMORE | $15,525 | $315,000 | $111,468 | $15,525 | |||
| BIRMINGHAM | $146,426 | $11,050 | |||||
| BOSTON | $210,000 | $22,200 | $210,000 | ||||
| BUFFALO | $30,000 | $30,000 | |||||
| CHARLOTTE | $326,900 | $287,139 | $45,301 | ||||
| CHICAGO | $24,725 | $231,695 | $384,547 | $122,542 | |||
| CINCINNATI | $420,629 | $99,595 | $35,625 | $1,244 | $66,804 | ||
| CLEVELAND | $360,463 | $585,000 | $360,463 | ||||
| COLUMBIA | |||||||
| DALLAS | $79,535 | $68,689 | $103,192 | $27,000 | $57,785 | $48,539 | |
| DENVER | $74,330 | $6,775 | |||||
| DETROIT | $14,450 | $335,943 | $199,893 | $6,720 | |||
| EL PASO | $2,800 | ||||||
| HONOLULU | $243,050 | $401,752 | $21,275 | $38,852 | |||
| HOUSTON | $310,215 | $22,300 | $132,696 | $123,300 | |||
| INDIANAPOLIS | $39,500 | $39,500 | |||||
| JACKSON | $21,225 | $33,862 | $86,992 | ||||
| JACKSONVILLE | $86,197 | $93,614 | $783,642 | $49,920 | $36,277 | $99,775 | |
| KANSAS CITY | $349,575 | $279,659 | $54,897 | $292,778 | $101,117 | ||
| KNOXVILLE | |||||||
| LAS VEGAS | $27,611 | $1,267,436 | |||||
| LITTLE ROCK | $1,144,375 | $57,450 | $304,175 | $860,300 | |||
| LOS ANGELES | $1,159,957 | $968,500 | $775,000 | $646,907 | $93,586 | $1,646,318 | |
| LOUISVILLE | |||||||
| MEMPHIS | $6,182 | ||||||
| MIAMI | $506,864 | $2,891 | $25,003 | $162,000 | $11,440 | $383,973 | |
| MILWAUKEE | |||||||
| MINNEAPOLIS | $472,197 | ||||||
| MOBILE | $3,944 | $224,125 | |||||
| NEWARK | $611,188 | $3,137,110 | $14,520 | $128,135 | $3,555,928 | ||
| NEW HAVEN | $4,850 | $145,598 | |||||
| NEW ORLEANS | |||||||
| NEW YORK | $207,506 | $1,361,754 | $418,933 | $72,627 | $110,000 | $404,354 | |
| NORFOLK | $127,775 | $146,009 | $103,100 | ||||
| OKLAHOMA CITY | $4,326,185 | $2,500 | $90,099 | $37,875 | $81,722 | $4,498,189 | |
| OMAHA | $512,109 | $484,584 | |||||
| PHILADELPHIA | $46,645 | $67,761 | $5,650 | $260,477 | |||
| PHOENIX | $90,361 | ||||||
| PITTSBURGH | |||||||
| PORTLAND | $681,984 | $150,450 | $681,984 | ||||
| RICHMOND | $200,000 | $200,000 | |||||
| SACRAMENTO | $25,539 | $68,938 | $80,304 | $16,739 | $73,938 | ||
| ST. LOUIS | $32,000 | $32,000 | |||||
| SALT LAKE CITY | $7,866 | ||||||
| SAN ANTONIO | $5,000 | $5,000 | |||||
| SAN DIEGO | $223,132 | $4,687,473 | $195,934 | ||||
| SAN FRANCISCO | $274,913 | $20,425 | $916,735 | $143,872 | |||
| SAN JUAN | |||||||
| SEATTLE | $1,875,683 | $473,117 | $123,247 | $6,375 | $290,352 | ||
| SPRINGFIELD | |||||||
| TAMPA | $7,000 | $15,332 | $20,512 | $328,029 | |||
| WFO | $356,805 | $255,870 | $1,406,626 | $181,431 | $291,125 | ||
| TOTAL | $13,277,362 | $7,703,435 | $16,343,881 | $4,013,342 | $3,407,971 | $14,254,838 | |
SEIZURES FOR FISCAL YEAR 2004
(DOES NOT INCLUDE FAST TRACK AND CASES BELOW $25,000)
| TYPE | BANKS | SAVINGS & LOANS | CREDIT UNIONS |
|---|---|---|---|
| FAILURES | -$0- | -$0- | -$0- |
| >100K | $15,212,471 | $775,000 | $218,109 |
| $25K-$99K | $89,620 | -$0- | $35,000 |
FORFEITURES FOR FISCAL YEAR 2004
(DOES NOT INCLUDE FAST TRACK AND CASES BELOW $25,000)
| TYPE | BANKS | SAVINGS & LOANS | CREDIT UNIONS |
|---|---|---|---|
| FAILURES | $360,463 | -$0- | -$0- |
| >100K | $13,135,611 | $549,209 | $118,200 |
| $25K-$99K | $91,355 | -$0- | -$0- |
E. DISRUPTIONS AND DISMANTLEMENTS
As previously stated, part of the FBI's mission in combating FIF is to disrupt and dismantle criminal organizations engaged in FIF. The matrix which follows demonstrates accomplishments in these areas for FYs 2002 - FY 2004.
| FISCAL YEAR | DISRUPTIONS | DISMANTLEMENTS |
| 2002 | 4 | 9 |
| 2003 | 19 | 7 |
| 2004 | 43 | 28 |
F. FINANCIAL INSTITUTION FRAUD CASE SUMMARIES
On 09/17/2004, the FBI announced action against individuals in the takedown of the largest nationwide enforcement operation in FBI history directed at organized groups and individuals engaged in financial institution fraud. This initiative, "Operation Continued Action," involved the coordination of 47 FBI field offices, the Criminal Division of the Department of Justice, participating United States Attorney's Offices, federal, state, and local law enforcement agencies and financial institution regulatory agencies that work with the FBI on a daily basis in combating financial institution fraud. Operation Continued Action covered a 30-day period and identified more than 271 subjects in 158 investigations. More than 151 indictments, informations, and complaints were filed. These charges led to more than 144 arrests, convictions, sentences, and millions of dollars in forfeiture and restitution. The cases included in this takedown represented potential losses due to fraudulent activities against financial institutions in excess of $3 billion. The following pages contain cases included in this takedown as well as samples of case summaries the FBI and its law enforcement partners were involved with during FY 2004.
OPERATION CLEAN DEED
On 09/16/2004, informations were filed in U.S. District Court, Western District of North Carolina, charging six individuals with bank fraud for their roles in a multimillion-dollar mortgage fraud. In November 2002, an FBI undercover operation was initiated utilizing a cooperating witness to introduce undercover FBI Agents into seven organizations involved in a multimillion-dollar mortgage fraud ring. Investigation led to the identification of fraudulent loans which exposed financial institutions and mortgage companies to potential losses of $130 million.
REO FLIPWAGON
In December 2003, the FBI initiated an undercover operation to address the massive amount of mortgage fraud in the Jacksonville area. On 09/16/2004, as a result of this investigation, seven search warrants were executed and two arrests were made. Mortgage broker J.R. Parker and closing attorney Dale Beardsley, were arrested via complaint, charging them with bank fraud for their role in this alleged scheme.
JEFFREY GROSSMAN;
DONALD GRAUER;
dba THE CHURCHILL GROUP
On 09/09/2004, Jeffrey Grossman entered a guilty plea in U.S. District Court and on 08/30/2004, Donald Grauer entered a guilty plea in U.S. District Court to bank fraud charges. Grauer and his business partner Grossman, conducted business as the Churchill Group, operating numerous real estate developments in the Chicago area. It is alleged that in the course of constructing two condominium complexes, they submitted numerous fraudulent vouchers as part of their monthly draw requests to Oak Brook Bank and Fifth Third Bank. Losses due to their alleged activities exceed $15 million. Both subjects have been charged with bank fraud and false statements.
GERALD SMALL, ET AL;
dba AMERIFUNDING
On 08/25/2004, Gerald Small, Kelli Burkhalter-Small, Charles Winnett, Chad Heinrich, and Robert Sigg were arraigned in U.S. District Court, District of Colorado. These subjects were charged with bank fraud stemming from their alleged roles in a scheme to obtain loans employing stolen identities, and then utilizing these loan proceeds to purchase substandard houses which were used to perpetuate this scheme. Losses attributable to this alleged scheme exceed $19 million.
BRENT BARBER,
dba MIDTOWNE RESTORATION, L.L.C.
On 08/16/2004, Chauncey Joseph Calvert, Aronda Lynn Nicodemus, and Roderick Neil Criss were arraigned in U.S. District Court, Western District of Missouri, for their alleged role in a mortgage fraud ring which utilized straw purchasers to purchase property which was then foreclosed upon. This scenario was repeated approximately 300 times, resulting in losses in excess of $15 million. The alleged leader of this organization, Brent Barber, was arrested by Agents of the FBI, Internal Revenue Service, and the Department of Housing and Urban Development - Office of Inspector General.
ALLIED DEALS, INC.
On 09/09/2004, based upon a provisional arrest warrant obtained following his indictment in the Southern District of New York, Gaya Gayarinth, an attorney for Allied Deals, Inc., was arrested in Bangalore, India. On 08/25/2004, Josielynn Salumbides was sentenced to 63 months in jail and ordered to make restitution in the amount of $683,632,800. Manoj Nijhawan was sentenced to 41 months in jail and ordered to make restitution in the amount of $683,632,800, and Kaushik Amin was sentenced to 18 months in jail and ordered to make restitution in the amount of $2,211,858. This case was initiated based upon information from a syndicate of U.S. financial institutions alleging Allied Deals, Inc., had executed a worldwide fraud scheme through the pledging of fraudulent bills of lading to obtain credit. This scheme resulted in $500 million in losses to U.S. financial institutions, as well as an additional $500 million in losses to financial institutions in the United Kingdom. To date, 14 individuals have been convicted in this matter.
STEVE MYERS,
dba STEVE MYERS AUTO SALES
On 09/10/2004, Tom Winkle was sentenced to 78 months in prison and ordered to make restitution in the amount of $8,054,000. On 08/23/2004, Myers was sentenced to 60 months in prison and ordered to make restitution in the amount of $8,054,000. Myers, the owner of Steve Myers Auto Sales, teamed with Winkle, the owner of Tom Winkle Chevrolet, to carry out a check kite which resulted in the deposit of more than $495 million in bad checks to banks in the Lima, Ohio, area. This check kiting scheme inflicted losses of approximately $8 million and contributed to the failure of the Oakwood Savings Bank.
DAVID SCHICK
On 08/18/2004, David Schick was sentenced to 97 months in federal prison for his scheme to defraud several banks through a check-kiting scheme. In this scheme, Schick funneled worthless checks through a network of shell corporations he set up. Losses attributable to this scheme were $2.2 million.
RICHARD BURLEY; TIMOTHY CLARK;
KHARY LAWSON; THEODORE WASHINGTON,
aka "CASH MONEY BOYS"
On 09/01/2004, above-captioned subjects were charged in U.S. District Court, Eastern District of Michigan, on bank fraud and conspiracy charges for their alleged roles in an identity theft ring which derived profits of more than $2 million. This indictment was the result of the investigative efforts of the Detroit Metro Identity Fraud Task Force (DMIFTF). The DMIFTF comprises Agents from the FBI, U.S. Postal Inspection Service, United States Secret Service, the Michigan State Police, and several local police departments. Since its inception in 1999, the DMIFTF has accounted for more than 100 convictions for identity theft-related crimes.
PHILIP J. CUMMINGS;
FORD MOTOR CREDIT - VICTIM
On 09/14/2004, Philip J. Cummings, former Telecommunications Data, Inc., technical support representative, pled guilty in U.S. District Court, Southern District of New York, to one count of Title (T) 18, U.S. Code (USC), Section 1343 - Wire Fraud, one count of T18, USC, Section 1028 - Fraud Related to Identification Documents and Information and one count of T18, USC, Section 371- Conspiracy, for his participation in a massive scheme to steal the identities of individuals which defrauded financial institutions of more than $11 million. It was alleged that Cummings stole the passwords and access codes of Ford Motor Credit and other financial companies, to access Equifax, Trans Union, and Experian credit report records and downloaded credit report information on 30,000 individuals. These credit reports were allegedly sold to a group of co-conspirators. To date, this is the largest identity theft case.
RANDY K. MCARTHUR;
DEAN JOHNSON;
BANK OF EPHRAIM - VICTIM
On 09/13/2004, Randy McArthur, Supervisor of Tellers, Bank of Ephraim, Ephraim, Utah, and his associate, Dean Johnson, entered guilty pleas to bank fraud charges for their alleged roles in a $5 million embezzlement scheme which contributed to the failure of the Bank of Ephraim. This embezzlement took place over a 20-year period.
CYNTHIA REYNOLDS;
NORTH ISLAND FINANCIAL CREDIT UNION - VICTIM
On 08/20/2004, pursuant to an information, Cynthia Reynolds pled guilty to one count of Title (T) 18, U.S. Code (USC), Section. 657 - Embezzlement, and one count of T18, USC, Section 982 - Criminal Forfeiture, before U.S. Magistrate Judge Jan Adler in the Southern District of California. The plea also directed her to quit-claim her residence to the North Island Financial Credit Union (NIFCU), as funds from the fraud had been used to pay for the residence. Cynthia Reynolds was an employee of NIFCU. As part of her responsibilities, she was authorized to move funds in and out of the NIFCU real estate suspense account. Reynolds embezzled at least $917,713 from that account by transferring money from the suspense account into a relative's account at NIFCU. Reynolds also generated official NIFCU checks drawn on the suspense account and improperly used these checks to purchase vehicles and pay various individuals and businesses for her and her relatives' benefit. Reynolds concealed her activity by making false entries into NIFCU's general ledger system.
BARBARA JANE COWARD
UTAH COPPER EMPLOYEE'S CREDIT UNION-VICTIM
On 09/15/2004, Barbara Jane Coward was indicted for embezzling from the Utah Copper Employee's Credit Union (UCECU). Coward was employed as the manager of the UCECU, where she had worked for 54 years. Coward allegedly embezzled approximately $2.4 million from UCECU during a 40-year period, through the creation of fictitious loans.
DECEPTIVE INNSIDER
This case is a $100 million bank and tax fraud investigation against the owners and executive officers of Tollman-Hundley Hotels, formerly the largest franchisee of Days Inn Hotels. It was alleged that Tollman-Hundley had the means to repay approximately $100 million in bank loans, but defrauded the institutions by convincing them that the guarantors of the loans, Stanley Tollman and Monty Hundley were insolvent. They then created and funded a sham third party which bought the loans from the banks at .20 cents on the dollar, defrauding the banks of approximately $80 million. It was further alleged that Tollman family members were hiding assets derived from unreported income in the Channel Islands. In February 2004, after a three- month trial, four defendants, Monty Hundley, Sanford Freedman, James Cutler, and Howard Zukerman, were convicted of bank fraud, conspiracy, false statements, perjury, and tax charges. On 03/12/2004, Brett Tollman pled guilty to conspiracy and tax charges and was sentenced on 03/12/2004 to 33 months in prison. This is a joint investigation between the FBI New York -White Plains Resident Agency and IRS-Criminal Investigations.
ROBERT B. CREAMER;
COLE TAYLOR BANK - VICTIM
On 03/10/2004, Robert B. Creamer was indicted in the Northern District of Illinois on 15 counts of Bank Fraud based on three independent check-kiting incidents occurring in 1993, 1996, and 1997, as well as 18 counts of Tax Evasion from 1996 to 2000. Creamer is the former Executive Director of the Illinois Public Action Fund, a not-for-profit public interest company that dealt with a variety of public issues. This case was jointly investigated by the FBI and IRS-Criminal Investigations.
MICHAEL A. LAWSON;
ROBERT E. LAWSON, JR.;
dba LAWSON ROOFING & REMODELING
Michael A. Lawson and Robert E. Lawson, Jr., operated Lawson Roofing & Remodeling (LR&R). LR&R obtained preferred provider status with Allstate Insurance under false pretenses and utilized that status to obtain more than $600,000 in loans from Wells Fargo Bank. The brothers initially utilized the loan funds for the business, but later diverted funds to drug use and other personal uses. On 02/19/2004, Michael A. Lawson and Robert E. Lawson, Jr., were arrested after having been indicted by a Federal Grand Jury on charges of Conspiracy (one count) Bank Fraud (four counts), Mail Fraud (one count), Wire Fraud (one count), Money Laundering (two counts), Felon in Possession of Firearms/Ammunition (two counts), and Illegal Drug User in Possession of Firearms/Ammunition (two counts). On 04/21/2004, the two pled guilty to conspiracy and firearms charges. On the date of his arrest on the bank fraud charges, Robert Lawson was interviewed by the FBI and United States Secret Service. At that time, Lawson admitted to the murder of Bethany Correira, an Anchorage college student, and led investigators to her body. Michael Lawson was arrested on charges relating to that murder on 05/26/2004.
DAVID MALIN;
SBA DEVELOPMENT INCORPORATED - VICTIM
David Malin embezzled approximately $4.9 million from SBA Development Incorporated (SBADI). Malin was the CFO of SBADI, a Las Vegas-area development company. Malin utilized a correctable typewriter to alter company checks that were payable to various development projects, making them payable to himself. Malin would then void the checks in the company check register and later remove the information regarding the checks from the SBADI bank statements. On 06/03/2004, Malin was arrested based on a complaint and arrest warrant. Malin confessed and has subsequently pled guilty to an information.
MARK KOVACK;
JACKSONVILLE SAVINGS BANK - VICTIM
Investigation reveled that from approximately 1995 and continuing through 2001, Mark Kovack, former Vice President, Branch Manager and Loan Officer at Jacksonville Savings Bank (JSB), converted bank funds to his personal use, initiated nominee loans, and made false entries to conceal the true status of delinquent loans from the Federal Deposit Insurance Corporation and other bank officers. JSB suffered a loss of $1,022,684 attributable to Kovack's fraudulent activity. Kovack was indicted in the Central District of Illinois on 10/01/2003, for violation of Title (T) 18, U.S. Code (USC), Section 1344, Bank Fraud. On 02/27/2004, Kovack pled guilty to one count of T18, USC, Section 1344, Bank Fraud. Kovack is scheduled to be sentenced on 01/28/2005. This investigation is a joint effort by the FBI, IRS-Criminal Investigations, U.S. Postal Inspection Service, and Housing and Urban Development - Office of Inspector General.
GEORGE L. YOUNG;
KATHLEEN MCCONNELL, dba
UNITED LIVESTOCK SERVICES (ULS), L.L.C.;
PROFESSIONAL BUSINESS SERVICES (PBS), INC.;
U.S. BANK, MINNEAPOLIS, MINNESOTA - VICTIM;
FIRST NATIONAL BANK, OMAHA, NEBRASKA - VICTIM
On 05/24/2004, George L. Young and Kathleen McConnell, former principals in ULS, were sentenced by United States District Court Judge Fernando J. Gaitan, Jr., in U.S. District Court, Western District of Missouri (WDM), for their roles in the largest fraud case prosecuted in the WDM. Young was sentenced to nine years' incarceration to be followed by five years of supervised release, while McConnell was sentenced to seven years and three months' imprisonment, also to be followed by five years of supervised release. Each individual was also ordered to make restitution in the amount of $182,981,100. These defendants entered guilty pleas to two counts of Mail Fraud, one count of Wire Fraud, one count of False Statements to the U.S. Department of Agriculture (USDA) (T15, USC, Section 2) and one forfeiture count in the amount of $24,534,320.
The FBI, along with members of the USDA-Grain Inspectors, Packers & Stockyards Administration, and Special Agents from the Office of Inspector General-USDA jointly investigated this complex fraud case involving 125 victim investors, multiple judicial districts, and 38 victim financial institutions.
JEAN PIERRE HARPER,
aka JOHNNY HARPER;
ET AL;
COMPASS BANK;
BIRMINGHAM, ALABAMA - VICTIM
On 02/09/2004, Jean Pierre Harper, a former Compass Bank (CB) Vice President, was sentenced by Judge Inge Johnson, U.S. District Court, Northern District of Alabama, to 46 months' confinement, three years of supervised release, and restitution in the amount of $4,298,385.10. On 10/29/2003, Harper pled guilty to one count of conspiracy to commit bank fraud and bank bribery. Harper, acting in his position at the bank, allowed a telemarketing scheme to defraud CB of approximately $10 million. A Federal Grand Jury indicted Harper in August 2002. After being indicted, Harper fled across the U.S. border into Mexico and later to Costa Rica where authorities arrested him in May 2003. It was alleged that Harper accepted bribes from questionable telemarketers, many from Nevada, to process credit card charges at CB's credit card processing center. Such actions violated bank policy.
This case was investigated jointly by the FBI and United States Secret Service.
ELIE ABBOUD;
MICHEL ABBOUD;
NATIONAL CITY BANK (NCB) - VICTIM;
PARK VIEW FEDERAL (PVF) - VICTIM
Investigation determined Elie Abboud and his brother, Michel Abboud, engaged in a pattern of manufacturing false and fraudulent information to artificially inflate their account balances at National City Bank and Park View Federal Bank. This scheme resulted in these two financial institutions absorbing a combined loss of $2.7 million. On 07/13/2004, Elie Abboud and Michel Abboud were sentenced to 97 months in federal prison by U.S. District Court Judge John M. Manos, U.S. District Court, Northern District of Ohio, for their convictions on money laundering, bank fraud, and conspiracy charges. Following a two-week jury trial in February 2004, the Abboud brothers were convicted on all 70 counts of the indictment that alleged they had orchestrated a massive check kite to obtain cash to operate their businesses.
DAVID ALAN WOLF;
BEVERLY HILLS BAR ASSOCIATION - VICTIM
David Alan Wolf was employed by the Beverly Hills Bar Association (BHBA) as its Controller/Director of Administration. Wolf embezzled funds by making checks payable to himself and depositing them into his account. Wolf forged signatures on the checks or deceived other employees into signing them as Wolf did not have signatory authority on the account. On occasion, he would embezzle checks that had been pre-signed by an employee that was going out of town. Wolf utilized the funds to feed a gambling habit. The total amount embezzled was approximately $800,000. On 06/15/2004, Wolf plead guilty to three counts of violating Title 18, U.S. Code, Section 513 (Forgery of a Security). On 08/30/2004, Wolf was sentenced to 33 months in prison.
SAJID HUSSAIN, ET AL;
BANK UNITED - VICTIM
Sajid Hussain, a commercial real estate broker, operated a company called Certified Commercial Real Estate. Hussain recruited individuals to assist him in the perpetration of multiple, fraudulent land flips involving convenience stores. As part of the scheme, it was alleged that Hussain recruited Middle Eastern borrowers to purchase convenience stores with no money down. This scheme resulted in false statements by borrowers regarding their personal assets as well as the amount of equity (down payment) they would pay during the convenience store purchase. Banks and the Small Business Administration (SBA) approved loans to the purchasers based on these false representations. Bank United (BU) and the SBA loaned millions of dollars to borrowers that worked with Hussain as their broker. There were indications that the scheme was so well known in the Middle Eastern community that honest brokers could not complete legitimate transactions that required borrowers to pay the down payment.
These land transactions were actually land flips, where the value of the property was fraudulently inflated through multiple sales for the purpose of obtaining financing at the inflated value. Washington Mutual Bank, which purchased BU, lost $9 million on a single flip transaction by Hussain. Hussain conducted numerous flip transactions with SBA loans totaling well over $100 million. Hussain conspired with Matt Hassan, who was the middle buyer or facilitator in the land flips. Hussain personally benefitted by receipt of millions of dollars from the transactions in the form of brokerage fees, referral fees, payments to shell companies, and the payments of funds to co-conspirators. The investigation has led to the convictions of Hassan and Hussain, as well as the indictment of four co-conspirators. The investigation was conducted jointly with the SBA and U.S. Department of the Treasury.
GARY PETER WILLIAMS, ET AL;
UNION BANK - VICTIM
This case involves a forgery/identity theft ring, which is believed to have been in operation in the Seattle area since 2000. The Seattle Police Department (SPD) initiated the case, and it currently involves investigators from the SPD, Social Security Administration, U.S. Postal Inspector, and the FBI. The forgery/identity theft ring began operation by opening bank accounts at U.S. Bank using fake or stolen identities. They deposited counterfeit checks and withdrew the funds before the checks were returned, using check cashers or "runners." The scheme expanded to involve a number of Seattle-area banks, to include account takeovers of legitimate accounts as well as opening of fraudulent accounts. The group also opened credit card accounts at a number of retailers, using the stolen identities to establish the accounts. Once opened, the suspects purchase articles and return them for cash, purchase gift cards, and take cash advances at area casinos.
Runners allegedly provided their photos to Gary Peter Williams, who sent the photos with identifying information to contacts in Los Angeles via Federal Express and United Parcel Service. Those contacts then allegedly returned the fraudulent driver licenses and identification cards to Williams in Seattle, who had one of his runners pick up the package. Williams, along with his girlfriend Monica R. Jones, is alleged to have directed the runners in their activities, taking two-thirds of the profits while the runners kept one-third for their efforts.
To date, 11 subjects have been arrested, of which 10 have pled guilty and two subjects have been sentenced. Williams is awaiting trial. In addition, $17,995.64 in cash was seized from two subjects, along with several pieces of expensive jewelry. Thus far, $122,376.75 in restitution has been ordered to the victim banks by the Court.
STEVEN JOSEPH FIORENTINO; ET AL;
JOE FLOREK VOLKSWAGEN-AUDI DEALERSHIP
From 1997 to 2000, co-owners Steven Fiorentino and Jay Wigdore, directed employees at their dealership to falsify customer credit applications, credit bureau reports, Kelley Blue Book sheets, and vehicle sales contracts to guarantee customer loan approval at lending institutions. This fraud scheme inflicted financial losses on consumers, FDIC-insured financial institutions, private lenders and auto auctions. In October 2003, Fiorentino and three others pled guilty to Conspiracy and Mail Fraud for their part to commit fraud against a financial institution. A total of 13 people have been convicted in this case, including Wigdore. In 2004, three restitution hearings were held, and an exposure of $40 million in vehicle loans was identified and $5.5 million in losses were documented for 12 lending institutions in multiple states. This case was jointly investigated by the Flagstaff Police Department and the Coconino County Sheriff's Office.
CHALANA MCFARLAND; ET AL
On 04/27/2004, McFarland and 12 additional subjects were indicted in the Northern District of Georgia in a 158-count indictment charging them with mortgage fraud- related offenses. Losses attributable to this mortgage fraud group are in excess of $7 million. Between 11/12/2004 - 11/29/2004, 11 subjects pled guilty. A January 2005 trial date is set for McFarland. This was a joint investigation between the FBI and the U.S. Housing and Urban Development-Office of Inspector General.
DERRICK GRAYSON; ROBERT STEWART; ET AL
On 02/11/2004, Grayson and ten additional subjects were indicted and arrested in the Northern District of Georgia in a 295-count indictment charging this group with bank fraud in connection with their counterfeit check operation. The investigation determined that Grayson and Stewart operated a counterfeit check operation throughout 2003. During this time period, they were responsible for more than $1 million in losses in Georgia, Florida, Alabama, and South Carolina. All 11 subjects have pled guilty. In November 2004, Grayson was sentenced to130 months in jail. Stewart's sentencing is set for 01/05/2005. This was a joint investigation between the FBI and Atlanta Police Department.
ROBERT LEE ANDERSON; DENNIS WILSON; ET AL
In May 2004, the remaining subjects involved in a counterfeit check ring were sentenced in the Northern District of Georgia. This culminated the prosecution of ten subjects who manufactured and cashed counterfeit checks in the Atlanta, Georgia, area for approximately three years and caused losses in excess of $1.3 million. The leaders of this group, Robert Lee Anderson and Dennis Wilson, each received sentences of five years in jail for their participation and organization of this counterfeit check ring.
